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69th Legislature 2025 HB 868.1
- 1 - Authorized Print Version – HB 868
1 HOUSE BILL NO. 868
2 INTRODUCED BY S. ROSENZWEIG
3
4 A BILL FOR AN ACT ENTITLED: “AN ACT REVISING TAX RATES FOR NET LONG-TERM CAPITAL GAINS;
5 AMENDING SECTION 15-30-2103, MCA; AND PROVIDING AN APPLICABILITY DATE.”
6
7 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
8
9Section 1. Section 15-30-2103, MCA, is amended to read:
10 "15-30-2103. Rate of tax -- net long-term capital gains -- definitions. (1) Except as provided in
11 subsections (2) and (3), there must be levied, collected, and paid for each tax year on the Montana taxable
12 income of each taxpayer subject to this chapter a tax on the brackets of taxable income as follows:
13 (a) for every married individual who files a joint return and for every surviving spouse:
14 (i) on the first $41,000 of Montana taxable income or any part of that income, 4.7%;
15 (ii) on any Montana taxable income in excess of $41,000 or any part of that income, 5.9%;
16 (b) for every head of household:
17 (i) on the first $30,750 of Montana taxable income or any part of that income, 4.7%;
18 (ii) on any Montana taxable income in excess of $30,750 or any part of that income, 5.9%;
19 (c) for every individual other than a surviving spouse or head of household who is not a married
20 individual:
21 (i) on the first $20,500 of Montana taxable income or any part of that income, 4.7%;
22 (ii) on any Montana taxable income in excess of $20,500 or any part of that income, 5.9%;
23 (d) for every married individual who does not make a joint return and for every estate or trust not
24 exempt from taxation under the Internal Revenue Code:
25 (i) on the first $20,500 of Montana taxable income or any part of that income, 4.7%;
26 (ii) on any Montana taxable income in excess of $20,500 or any part of that income, 5.9%.
27 (2) Except as provided in 15-30-3704 and subsection (3) of this section, that portion of a taxpayer's
28 Montana taxable income that consists of net long-term capital gains after accounting for amounts included in
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69th Legislature 2025 HB 868.1
- 2 - Authorized Print Version – HB 868
1 taxable income that is not net long-term capital gains is subject to a tax on the brackets of net long-term capital
2 gains as follows:
3 (a) for every married individual who files a joint return and for every surviving spouse:
4 (i) on the first $41,000 $50,000 less nonqualified taxable income of net long-term capital gains,
5 3.0% 2%;
6 (ii) on net long-term capital gains that exceed $50,000 and are less than $250,000 less
7 nonqualified taxable income of net long-term capital gains, 4%;
8 (iii) on net long-term capital gains that exceed $250,000 and are less than $2 million less
9 nonqualified taxable income of net long-term capital gains, 4.5%;
10 (ii)(iv) on net long-term capital gains that exceed $41,000 $2 million less nonqualified taxable income
11 or any part of that income, 4.1% 5%, except that if the total nonqualified taxable income is $41,000 $2 million or
12 greater, all of the net long-term capital gains are taxed at 4.1% 5%;
13 (b) for every head of household:
14 (i) on the first $30,750 $37,500 less nonqualified taxable income of net long-term capital gains,
15 3.0% 2%;
16 (ii) on net long-term capital gains that exceed $37,500 and are less than $187,500 less
17 nonqualified taxable income of net long-term capital gains, 4%;
18 (iii) on net long-term capital gains that exceed $187,500 and are less than $1.5 million less
19 nonqualified taxable income of net long-term capital gains, 4.5%;
20 (ii)(iv) on any net long-term capital gains that exceed $30,750 $1.5 million less nonqualified taxable
21 income or any part of that income, 4.1% 5%, except that if the total nonqualified taxable income is $30,750 $1.5
22 million or greater, all of the net long-term capital gains are taxed at 4.1% 5%;
23 (c) for every individual other than a surviving spouse or head of household who is not a married
24 individual:
25 (i) on the first $20,500 $25,000 less nonqualified taxable income of net long-term capital gains,
26 3.0% 2%;
27 (ii) on net long-term capital gains that exceed $25,000 and are less than $125,000 less
28 nonqualified taxable income of net long-term capital gains, 4%;
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69th Legislature 2025 HB 868.1
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1 (iii) on net long-term capital gains that exceed $125,000 and are less than $1 million less
2 nonqualified taxable income of net long-term capital gains, 4.5%;
3 (ii)(iv) on any net long-term capital gains that exceed $20,500 $1 million less nonqualified taxable
4 income or any part of that income, 4.1% 5%, except that if the total nonqualified taxable income is $20,500 $1
5 million or greater, all of the net long-term capital gains are taxed at 4.1% 5%;
6 (d) for every married individual who does not make a joint return and for every estate or trust that
7 is not exempt from taxation under the Internal Revenue Code:
8 (i) on the first $20,500 $25,000 less nonqualified taxable income of net long-term capital gains,
9 3.0% 2%;
10 (ii) on net long-term capital gains that exceed $25,000 and are less than $125,000 less
11 nonqualified taxable income of net long-term capital gains, 4%;
12 (iii) on net long-term capital gains that exceed $125,000 and are less than $1 million less
13 nonqualified taxable income of net long-term capital gains, 4.5%;
14 (ii)(iv) on any net long-term capital gains that exceed $20,500 $1 million less nonqualified taxable
15 income or any part of that income, 4.1% 5%, except that if the total nonqualified taxable income is $20,500 $1
16 million or greater, all of the net long-term capital gains are taxed at 4.1% 5%.
17 (3) By November 1 of each year, the department shall multiply the bracket amounts contained in
18 subsections (1) and (2) by the inflation factor for the following tax year and round the cumulative brackets to the
19 nearest $100. The resulting adjusted brackets are effective for that following tax year and must be used as the
20 basis for imposition of the tax in subsections (1) and (2).
21 (4) For the purposes of this section, the following definitions apply:
22 (a) "Net long-term capital gains" means net long-term capital gains as that term is defined in
23 section 1222 of the Internal Revenue Code, 26 U.S.C. 1222.
24 (b) "Nonqualified taxable income" means Montana taxable income that is not considered net long-
25 term capital gains."
26
27 NEW SECTION. Section 2. Applicability. [This act] applies to income tax years beginning after
28 December 31, 2025.
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69th Legislature 2025 HB 868.1
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